PetroShale is expanding its asset base Maxine Herr
For Petroleum News Bakken
PetroShale is expanding its asset base throughout the Williston Basin and its reserves have increased significantly since the end of 2013.
The Williston Basin-focused non-operator issued its second quarter results on Aug. 26, touting total proven reserves on its U.S. assets at more than 3.1 million barrels of oil equivalent, boe, which is a 516 percent increase from Dec. 31, 2013. On a proven and probable reserves basis, U.S. booked reserves rose 525 percent to 4.1 million boe.
In the six months preceding the end of the second quarter, PetroShale acquired leases in McKenzie, Williams and Mountrail counties for a combined total of approximately $13.4 million, representing various working interests in potential drilling units as well as federal land with associated reserves. The acreage did not include any producing wells or facilities.
“Over a six month period, we have significantly enhanced the volume and value of our asset base for shareholders,” Executive Chairman M. Bruce Chernoff said in a statement.
During this time, the company also purchased additional working interest of approximately 9.5 percent in two existing Stockyard Creek wells in Williams County which were being drilled. The company also acquired interest in two additional parcels in McKenzie County.
PetroShale said its recent acreage expansions in the Williston Basin have brought its drilling and completion activity by its partners from eight gross (1.3 net) wells in the second quarter to 13 gross (2.0 net) wells today.
“With continued drilling activity by our partners in North Dakota, along with pursuing additional acquisitions, we intend to grow production, leading to enhanced revenue, cash flows and greater reserves bookings over time,” Chernoff said.
The company is positioned to grow its asset base with additional acquisitions due to a private placement of 5 million common voting shares at a price of $1.30 per share in June, generating $6.5 million gross proceeds. Following the second quarter, the company closed on several oil and gas mineral leases in the Williston Basin through various transactions with a total cash consideration of $4.4 million.
Production for the second quarter reached 298 boe per day, indicating an 89 percent increase year over year. PetroShale generated a 98 percent increase in royalties revenue over the previous quarter, slightly lower than the 101 percent hike it has experienced since the same period in 2013.
PetroShale’s non-operating model also combines a strategic partnership it has with Slawson Exploration, the 14th leading Bakken oil producer in North Dakota with daily output averaging 25,602 barrels of oil for operated, non-confidential wells, according to June data from the North Dakota Department of Mineral Resources. PetroShale utilizes the partnership to identify new opportunities and allow the company to experience fast growth in the Bakken, according to company statements.
“Slawson is known as an innovator and fast follower with extremely efficient operations,” the company website says. “PetroShale’s low overhead allows for maximum efficiency in converting Slawson’s operations into production and EBITDA growth.”
PetroShale is a Calgary-based oil-weighted development and production company with a strategic focus on land interests with near term drilling exposure. The company entered the Bakken in 2013 when it acquired 105 net acres and a 1.5 percent working interest in 11 producing wells in the Bakken and Three Forks. It also maintains an office in Denver, Colorado. Although the company operates in both the U.S. and Canada, all of its exploration and evaluation assets are located in the U.S.